UK Budget 2014: handouts for the rich; nothing for the poor

This year’s budget from George Osborne has been described as the most typical Tory budget he has yet given. Whether that is correct is open to debate; but what is true is that it has many of the features of previous Tory budgets in a pre-election year: huge handouts to the rich, lots of shiny baubles for wavering Tory voters, and nothing for the poor.

In fact if you look a bit deeper it is clear that the working class will not even be getting away with nothing. The regime of austerity, despite all the talk of good times ahead, will not only continue but will deepen. The Independent Office for Budget Responsibility (OBR) have confirmed that 800,000 public sector jobs will go in the next period as part of a swinging programme of cuts.

The government has pledged to cut another £12 billion from the welfare bill next year, which will hit the poorest sections of society the hardest. It is now proposing to extend the cap on welfare spending through to the first year of the next parliament and into 2018/19. This affects all benefits except the state pension and the jobseekers allowance and prevents spending from increasing by more than the rate of inflation i.e. a defacto freeze. This will be voted on next week in parliament.

Incredibly, Ed Balls for Labour has said that the Party will vote in favour of this, in order to show big business how “responsible” they are. This is a disgrace - backing a measure that will cause misery for millions and joy for the millionaires. Labour should vote against such measures and demand that the Coalition puts its programme of austerity cuts to the voters in the form of an immediate general election. If Osborne wants a mandate for the cuts, this is the one he should be offered. If Labour fought such an election on the basis of socialist policies then the Tories and their Lib-Dem pals would be booted out en masse.

Many Tories were hoping that the giveaways in the chancellor’s speech will drag some wavering Tory voters back into the fold as an election draws closer. This was clearly the intention as he targeted middle-class pensioners and savers. Nothing here for poor pensioners who are fighting to survive on a basic pension with costs rising monthly. Indeed many of the measures intending to help the elderly poor – winter-fuel allowance, etc. – have now been placed into the Welfare Cap net and could be under threat. Osborne’s changes to saving plans will do nothing for those who have little in the bank or those eight million who have no savings at all. Needless to say, most of the giveaways were aimed at big business who will take the bulk of the benefits away from this budget.

Of course, underneath all the rhetoric of Osborne about the good times to come is the real budget that shows the grim reality behind all the talk. The OBR have confirmed that they expect UK growth to slow down. Even Osborne has felt it necessary to warn that the recovery to date has been unbalanced - i.e. based too much on property bubbles, etc.

Labour have already responded to Osborne by noting that this is the slowest recovery in 100 years and is taking place at half the rate forecast in 2010. The Tories are desperately hoping that things will stay on an even-keel up to the election date of May 2015. However, experts have already warned that Osborne is simply deferring the problem he faces until the next parliament, whoever wins.

Warnings have been issued that the next parliament will have to implement either huge cuts in spending, mainly to welfare, or introduce huge tax rises to make ends meet. Hopes that the deficit will be eliminated by 2018 are seen as fanciful at best. Britain’s lost triple-A rating remains missing in action with no hope of re-instatement anytime soon.

Britain’s recovery statistics are poor compared to other countries, as well as to other recoveries from recessions in the past. The Daily Mirror has produced data that shows that in Britain inflation is running at 1.9% against wage rises of 1.1%, whereas in Germany they have 1.2% inflation against a 2.4% level of wage increases. Manufacturing has decreased in the UK by 9% since 2008; the figure for the US is just 3% and for Germany 3.2%.

What we see here is a damming verdict, with these figures and many others, on the dismal failure of Osborne and the Tory-led coalition government. It is also a damming indictment of British capitalism itself, which benefited more than many others in the use of credit-fuelled booms to make huge profits before the financial crash, and which has proved less capable of digging itself out of the hole afterwards.

Despite all the bluster, Osborne has no answer to this. He is praying that nothing will go wrong in the next year, because if it does then the economy will slide off the rails in a spectacular fashion. Either way, the working class and the poorest and most vulnerable sections of society know they are in for a hammering whatever happens, both before and after the next election. The fight back must start now.

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